Posts under ‘China’

Shell’s Arrow Energy Cleared by Australia, China to Purchase Bow

Dec 16th, 2011

December 16, 2011, 2:21 AM EST

By James Paton

Dec. 16 (Bloomberg) — Arrow Energy Ltd., the natural gas producer owned by Royal Dutch Shell Plc and PetroChina Co., won approval from Australia’s Foreign Investment Review Board to buy Bow Energy Ltd. for A$535 million ($534 million).

The transaction was also cleared by Chinese authorities, Brisbane-based Bow said today in a statement. The decisions follow approval earlier this month by the Australian Competition & Consumer Commission.

Arrow, seeking additional resources for a liquefied natural gas venture in Queensland state, agreed in September to increase its takeover offer to A$1.52 a share in cash from A$1.48. The accord was 72 percent more than Bow’s price of 88.5 cents in Sydney before Arrow made its initial offer Aug. 22.

Brisbane-based Bow was valued at between A$1.14 and A$1.53 a share by independent analyst Grant Samuel, the company said Nov. 17. Samuel found the deal “highly attractive,” given the uncertain economic and market conditions, the premium given to shareholders and the “remote prospect of Bow shares trading above A$1.52 per share in the foreseeable future,” Bow said.

Arrow, also based in Brisbane, plans the fourth LNG venture in Queensland to meet rising Asian demand, following approvals for more than $50 billion in developments led by BG Group Plc, Santos Ltd. and ConocoPhillips. The acquisition may allow Arrow to expand output at the venture’s first two units by as much as 15 percent, it said in September.

Bow expects the transaction to be completed Jan. 11, it said last month.

–Editor: Keith Gosman,

To contact the reporter on this story: James Paton in Sydney at jpaton4@bloomberg.net

To contact the editor responsible for this story: Andrew Hobbs at ahobbs4@bloomberg.net

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Could Chinese Shale Mean the End of U.S. Shale Gas Boom?

Dec 13th, 2011

by John Donovan.

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By Pierre Bertrand | December 12, 2011 5:47 PM EST

China‘s natural gas industry is still developing, but already it is showing signs that worry some players in the U.S.

Last week, Royal Dutch Shell and Chinese officials announced the company found shale gas in two wells in the Shichuan province, and that production was overall positive. That was coupled with reports that China‘s state-run PetroChina was producing more than 10,000 cubic meters of gas from 20 wells in the province, according to the Business Monitor International.

The news was met with some trepidation, fostering fears among U.S. players that a strong Chinese domestic natural gas industry will cut global demand for liquified natural gas and natural gas exports — effectively killing the U.S. shale gas boom.

IHS Global Insight, in a report published this month, expects a large portion of U.S. growth will depend on natural gas exploration and production. By 2035, the industry is expected to support 1.6 million jobs and bring in $231 billion to the country’s GDP — that’s a 203.9 percent increase from last year.

But John Felmy, chief economist with the American Petroleum Institute, said as long as the U.S. natural gas market remains isolated from the rest of the world, China’s developing natural gas industry is unlikely to hurt the U.S.

Unlike the oil industry, which is linked extensively to the rest of the world, natural gas is less connected, he said. This protects the country’s natural gas industry from foreign players like China, whose natural gas resources are believed to be larger, Felmy added.

But if the U.S. starts trading more natural gas and establishes more connections with the Asian country, Felmy said he suspects analysts would worry that China could gain a productive advantage like it has done with other products it exports to the U.S., and that could come back to hurt the local natural gas industry.

Andrew Snyder, editorial director of Insiders Stragety Group, a financial research firm based in Baltimore, said the U.S. is facing a natural gas glut and in trying to relieve it, the idea of exporting it to overseas markets is growing, and that includes China, the world’s top energy consumer.

But if China starts developing its own natural gas industry, the country will not need foreign imports, leaving the U.S. with increasing supply and nowhere to ship it. Snyder said he suspects natural gas prices are going to fall and keep falling as Chinese and European natural gas plays pick up speed. This invariably would slow the domestic natural gas boom seen in the U.S. Northeast, Northwest and Texas.

“If we lose that, it’s not going to be doom and gloom, but it’s not the big boom people are expecting,” Snyder said. “[The boom] is not going to be as euphoric as many people think.”

China by 2015 expects to produce 6.5 billion cubic meters, or 229.54 billion cubic feet of natural gas. That same year, Chinese government officials say the country will have roughly 7 trillion cubic feet of recoverable natural gas with an additional 35.3 trillion cubic feet in reserves, according to The China Perspective, an online Chinese financial news publication.

The Center for American Progress, in a report published in October, said China has 1,300 trillion cubic feet of shale natural gas reserves, compared to 862 trillion cubic feet the U.S. has in reserves.

“After a while, we are going to hit a saturation point,” Snyder said, adding that natural gas in the in the U.S. would have to reflect the dropping prices.

The U.S., however, can look to be ahead for a while longer. Given the amount of time it took the U.S. to start tapping into its shale deposits, Snyder believes that it won’t be for another decade before China gets on the ball and taps into its own resources.

To report problems or to leave feedback about this article, e-mail: p.bertrand@ibtimes.com

To contact the editor, e-mail: editor@ibtimes.com

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CNPC Relies on Shell, Exxon Mobil to Develop Chinese Shale Gas

Dec 8th, 2011

by John Donovan.

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December 08, 2011, 10:58 AM EST

By Wael Mahdi

Dec. 8 (Bloomberg) — China National Petroleum Corp. will rely on help from Royal Dutch Shell Plc and Exxon Mobil Corp. amongst others to develop its shale gas resources.

CNPC is working with Shell on a project in central China to develop shale gas, its president Zhou Jiping told reporters today in Doha, Qatar. The company has already made shale gas discoveries and it needs more time to develop them, he said.

“The tectonic movement in China is even stronger than in the U.S., and it’s making the structure more complex,” he said. China has more potential gas resources than the U.S., according to his estimates.

Chinese gas shale development will be more complex than in the U.S. because of a different geological formation, he said.

–Editors: Stephen Cunningham, Alex Devine.

To contact the reporter on this story: Wael Mahdi in Cairo at wmahdi@bloomberg.net

To contact the editor responsible for this story: Stephen Cunningham at scunningha10@bloomberg.net

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Shell Says Exports, Truck Fuel Among Options for U.S. Shale Gas

Dec 7th, 2011

by John Donovan.

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By Eduard Gismatullin – Dec 7, 2011 12:01 AM GMT

Royal Dutch Shell Plc (RDSA), Europe’s largest energy producer, is weighing options for rising North American natural-gas output including exports and making liquid fuels, Chief Executive Officer Peter Voser said.

Shell will double North American gas production in the next three years to the equivalent of 400,000 barrels of oil a day as output from shale deposits rises, Voser said in an interview. Shell may channel gas into chemical production, an export project in Canada, and a program to use the fuel to power trucks, he said.

“We are getting now into production phase in a big way,” Voser said at the World Petroleum Congress in Doha, Qatar. “It’s about the right time to look for further options. We are really looking at the usage of gas in a much wider way in North America.”

Pumping gas trapped in shale rocks has transformed the U.S. into the world’s largest gas producer, cut prices about 75 percent from their 2008 peak and made exports to higher priced markets in Asia and Europe a viable option. The fuel will overtake crude oil to account for more than 50 percent of Shell’s global production next year, driven in part by the development of shale gas fields in Texas and Pennsylvania.

“This percentage goes up over the next years to come as most of our projects are actually gas projects,” Voser said. “Given our huge gas reserves in the U.S. we are looking at a possibility to actually build a gas-to-liquids plant.”

Largest Project

Shell has invested about $19 billion in its Pearl gas-to- liquids plant in Qatar to make transportation fuel. It’s the company’s largest project to date and it plans to build another “large scale” unit, Andy Brown, Shell’s chief in Qatar, said earlier this week.

The company has gas reserves in North America of 40 trillion cubic feet, about 12 percent of the continent’s total at end of 2010, based on data from BP Plc’s Statistical Review of World Energy. The company spent $4.7 billion last year to buy most of East Resources Inc., a shale producer with fields in Texas’s Eagle Ford area and Marcellus in Pennsylvania.

The Hague-based producer is working on the Green Corridor project in Canada to convert gas into 300,000 tons of liquefied natural gas a year to fuel long-haul trucks from next year. The fuel will be offered to operators along western Canada’s busiest truck route from Calgary to Edmonton, said Malcolm Brinded, executive director for exploration and production.

Shell is looking at using the LNG-to-transport technology in China and Europe, Voser said. It will be a smaller market than using gas to fire power plants, “but it’s a good usage of the gas,” he said.

“There is a great appetite for this type of solution,” he said. This market “will be growing. You can think of more, you can use it in the shipping industry.”

LNG Exports

The gap between natural gas and crude oil prices in North America is opening up the prospect of LNG exports to Asia and making chemical projects commercially viable. Today’s gas price is equivalent to about $27 a barrel of crude, while oil is trading at about $100 a barrel in New York.

Shell, together with PetroChina Co. and Japanese and South Korean partners, plans to develop an export facility in British Columbia in Canada to supply LNG to Asia.

In June, Shell announced plans to build an ethylene plant in Appalachia, the first so-called cracker built in the region in half a century, to tap low-cost natural gas for making plastics. The cracker would process gas from the Marcellus shale. The ethylene probably will be converted to polyethylene plastic at a second factory to be built at the site, Shell said.

To contact the reporters on this story: Eduard Gismatullin in London at egismatullin@bloomberg.net;

To contact the editors responsible for this story: Will Kennedy at wkennedy3@bloomberg.net;

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Shell strikes shale gas in China

Dec 6th, 2011

by John Donovan.

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By Tom Bergin

DOHA | Tue Dec 6, 2011 4:29am EST

(Reuters) – Royal Dutch Shell Plc has found shale gas in China, a development that could cap imports in a market natural gas producers are hoping will drive demand.

An official with Shell’s partner, PetroChina (601857.SS), a unit of the country’s top energy group, state-owned CNPC, said drilling results from two wells Shell drilled had been positive.

“Shell has two vertical wells and they got very good primary production,” Professor Yuzhang Liu, Vice president of Petrochina’s Research Institute of Petroleum Exploration and Development (RIPED), said in an interview at the sidelines of the World Petroleum Congress (WPC) in Doha.

“It’s good news for shale gas,” Liu, who regularly represents PetroChina at industry events around the world, told Reuters late on Monday.

China currently has no commercial shale gas production.

Some industry executives doubt the explosion of shale gas in the U.S. that has revolutionized the market there could be replicated elsewhere due to difficult geology, the lack of water availability or land access issues.

Liu accepted the rock formations in China were “different” from those in the United States but denied this meant they were more challenging or less bountiful.

In less than decade, shale gas has transformed the United States from gas shortage to a point where companies are planning to export liquefied natural gas (LNG), fundamentally altering the dynamics of the international gas market.

LNG projects freeze and squeeze natural gas into liquid for export in tankers. Many producers who were targeting the United States were forced to rethink their plans, and China, with its booming energy demand, was seen as the answer to their need for a market.

A Chinese ‘shale gale’ as the revolution was termed in America, could jeopardize that market too.

Shell declined to confirm the find but said in a statement;

“Shell will complete drilling activities by the year end… as planned.”

Chief Executive Peter Voser has previously said he has “great expectations” for Chinese shale but was cautious in his comments to the WPC on Tuesday.

“We are going through the exploration phase there and are exactly now analyzing what potential is available now in China,” he told a news conference.

In November 2009, PetroChina and Royal Dutch Shell agreed to jointly evaluate shale gas reserves of the Fushun-Yongchuan block in Sichuan basin.

Earlier this year, industry sources said Shell had started drilling two shale gas exploration wells in Fushun.

A U.S. Energy Information Administration report in April said China had 1,275 trillion cubic feet of technically recoverable shale gas resources — by far the largest in the world, followed by the United States with 862 trillion cubic feet and Argentina with 774.

(Reporting by Tom Bergin; Editing by Andrew Callus)

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E.U. sanctions force Shell to leave Syria

Dec 3rd, 2011

by John Donovan.

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Protesters opposed to Syrian President Bashar al-Assad face violent responses from security forces. The Arab League passed a series of measures censuring Syria for its actions.

By Javier Blas, Published: December 2

LONDON — Royal Dutch Shell said Friday it will “cease” activities in Syria after the European Union blacklisted three state-owned Syrian oil companies in an effort to raise the pressure on President Bashar al-Assad’s regime.

The European Union said Friday it has widened its sanctions on the oil companies, General Petroleum Co., Al Furat Petroleum Co. and Syria Trading Oil Co. The move is seen as a significant blow to Syria, with diplomats expecting it to curtail oil production in the country.

The Syrian groups are the local partners of various foreign oil companies, forcing them to stop working in the country.

Shell said it will cease its activities in compliance with sanctions. “Our main priority is the safety of our employees, of whom we are very proud,” the company told the Financial Times. “We hope the situation improves quickly for all Syrians.”

Industry officials say they believe that other European oil companies operating in the country, including Total of France and the London-listed Gulfsands Petroleum, will follow. Gulfsands said it would “comply with all of the latest E.U. sanctions” but would not comment on how that would affect its operations. Total did not respond immediately to a phone call seeking comment.

Royal Dutch Shell and Total are among the largest foreign investors in the Syrian crude oil industry. State-owned CNPC of China and ONGC of India are also large investors but will be unaffected by the European sanctions.

Separately, the U.N. Human Rights Council attacked Syria’s crackdown on opposition protesters and appointed a special investigator to probe abuses in the country. While 37 countries voted in favor of a resolution backed by the Arab League, the U.S. and European countries, Russia, China and four other members voted against, with six abstentions.

Navi Pillay, the U.N. high commissioner for human rights, told an emergency session of the council that more than 4,000 people had been killed in the repression since March and that more than 14,000 people were believed to be held in detention.

Syrian activists said at least 950 people were killed in November, making it the bloodiest month in the uprising against Assad’s government. Violence was reported throughout Syria on Friday. At least four people were reported to have been killed and dozens injured.

Diplomats in Brussels have begun informal discussions about what Syrian entities might be targeted by a next round of sanctions, although this would require weeks of negotiation and legal work before anything could be agreed to. Some member states want to place more emphasis on the country’s financial system, which has previously escaped sanctions, partly because of opposition from nearby Cyprus.

The European Union first imposed an embargo on oil exports from Syria in September, forcing the country to reduce production from 380,000 barrels a day to about 250,000 barrela a day one month later. Damascus has failed to find new customers for its crude, according to oil traders’ estimates. The country has also struggled to import refined products such as diesel.

Although Syria is a small crude producer, the global oil market is so tight that the loss of supplies has already been felt. The cost of Urals, a Russian crude of similar quality to some of the Syrian oil, has surged to unusually high levels against Brent crude, the global benchmark, as a result. Brent traded on Friday at $109.50 a barrel.

The latest round of E.U. sanctions would complicate the efforts of Damascus to secure refined products, industry sources said. Brussels blacklisted Sytrol, also known as the Syria Trading Oil Company, which traditionally handles fuel imports. Although Syria is an oil producer, the country lacks enough refining capacity to meet its demand and usually buys market diesel and liquefied petroleum gases in the Mediterranean.

The sanctions would probably come as a relief to Shell, providing a cover for the company to leave a country that represents a tiny fraction of its global business but has became a reputational problem. The London-listed company is unlikely to stop its operations overnight but rather wind them down over the next few weeks.

— Financial Times

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Shell says to cease activities in Syria

Dec 2nd, 2011

by John Donovan.

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Sanctions bite in Syria as oil giant Shell pulls out

By Douglas Hamilton

BEIRUT | Fri Dec 2, 2011 9:42am EST

(Reuters) – Royal Dutch Shell said on Friday it would cease operations in Syria to heed new European Union sanctions against Damascus, deepening the international isolation of President Bashar al-Assad imposed over his violent crackdown on popular unrest.

In the latest bloodshed, Syrian army defectors killed eight Air Force intelligence personnel in an attack on their base in the north of the country, according to an opposition group.

The incident suggested that armed deserters are turning increasingly from defending civilian protesters against violent repression by Assad’s security forces to an offensive of ambushes and roadside bombs, raising the specter of civil war.

Western and Arab countries have been intensifying punitive sanctions to press Assad to carry out pledges to halt bloodshed by withdrawing forces from restive cities, starts transition talks with the opposition and admit Arab League observers.

Royal Dutch Shell said it would shutting down in Syria to heed a batch of EU sanctions slapped on Syria’s economically vital oil and financial sectors the day before.

A Shell spokesman said: “Our main priority is the safety of our employees … We hope the situation improves quickly for all Syrians.”

The EU on Friday extended sanctions to three Syrian oil concerns, including the state-owned General Petroleum Corporation (GPC) and Syria Trading Oil (Sytrol), to crank up the financial pressure on the Assad government.

The three oil concerns were among 11 entities and 12 Syrian leadership figures added to an EU blacklist now aimed in part at bringing the Syrian ventures of oil giants to a halt. Royal Dutch Shell was the first to bow out.

U.N. High Commissioner for Human Rights Navi Pillay called for international action to protect Syria’s civilian population from “continual ruthless repression that, if not stopped now, can drive the country into a full-fledged civil war”.

More than 4,000 people have been killed, including 307 children, in the military crackdown on unrest since March and more than 14,000 people are believed to be held in detention, she told an emergency session of the U.N. Human Rights Council.

“In light of the manifest failure of the Syrian authorities to protect their citizens, the international community needs to take urgent and effective measures to protect the Syrian people,” Pillay said in Geneva. “All acts of murder, torture and other forms of violence must be immediately stopped.”

She voiced disquiet at reports of increased armed attacks by the opposition forces, including the so-called Free Syrian Army, against the Syrian military and security apparatus.

The British-based Syrian Observatory for Human Rights and other activists said at least 20 civilians were killed by Syrian security forces across the country on Thursday, mainly in the provinces of Hama and Homs – epicenter of the anti-Assad revolt.

The Observatory said the attack on Air Force intelligence took place in Idlib province, between the towns of Jisr al-Shughour and the Mediterranean port of Latakia.

“A clash ensued for three hours which led to the death of at least eight members of the Air Force Intelligence,” it said.

The Syrian state news agency SANA said security forces “on Thursday killed 5 armed men and arrested 35 others during a clash with armed terrorist members in the Hama countryside”.

It said dozens of Kalashnikov assault rifles, shotguns, grenades and explosives were seized.

OPPOSITION ORGANISING

The anti-Assad Syrian Free Army has formed a military council of nine defecting officers. They issued a declaration pledging to “bring down the regime and protect citizens from the repression … and prevent chaos as soon as the regime falls”.

The main civilian opposition group, the Syrian National Council, held a first meeting with Free Army leaders in Istanbul this week. A Council spokeswoman said the Council only supports a peaceful uprising and the Free Army is not its armed wing.

Syrian armed forces defectors began organizing three months ago and now number around 10,000, say opposition sources.

They cite increased operations in the last ten days by defectors and insurgents in the central regions Hama and Homs, Idlib on the border with Turkey, and the southern province of Deraa where armored convoys have been attacked.

U.S. Vice-President Joe Biden, on a visit to Ankara, praised Turkey for being “a real leader” on the Syrian crisis.

“We also welcome the government’s giving space in Turkey to the political opposition,” he told Hurriyet newspaper. “The United States’ position on Syria is clear. The Syrian regime must end its brutality against its own people and President Assad must step down so a peaceful transition that respects the will of the people can take place,” Biden said.

SANA said Syria had suspended a free trade zone pact with Turkey in retaliation for Ankara’s actions. Turkey, formerly a staunch ally of Assad, has also suspended financial credit dealings with Syria and frozen Syrian government assets, joining the Arab and Western campaign to isolate Assad.

In Paris, French Interior Minister Claude Gueant said on Friday he had taken steps to protect members of Syria’s National Council in France after recent threats.

“Given the troubles in Syria, we have seen a certain number of threats on Syrian opponents,” he told a press conference. “Measures to protect them have been taken.”

After a meeting with SNC chairman Burhan Ghalioun earlier this month, French Foreign Minister Alain Juppe said Paris considered the group to be the legitimate partner with which it wanted to work.

RUSSIAN EXCEPTION

The expanded EU sanctions list encompasses media companies and firms the EU says supply sensitive equipment to a research centre that supports Assad’s suppression of dissent. The United States and the Arab League have also imposed an array of economic sanctions and banned travel by some Syrian VIPs.

But Russia has opposed further sanctions and defended its right to sell arms to Syria. The Interfax news agency on Thursday reported the delivery of Russian anti-ship cruise missiles to Syria, a few days after a United Nations commission of inquiry called for an arms embargo on Damascus.

Russia traditionally uses what influence it still has in the Middle East as a lever in diplomatic maneuvering with Europe and the United States. Syria is also one of its major arms clients.

Russia and China, which both have oil concessions in Syria, teamed up in October to veto a Western-backed Security Council resolution condemning Assad’s government for the bloodshed.

(Additional reporting by Alister Bull in Iraq, Stephanie Nebehay in Geneva and Dmitry Zhdannikov in London; Editing by Mark Heinrich)

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Super Puma’s North Sea death crash fault ‘not recognised’

Nov 24th, 2011

by John Donovan.

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24 November 2011

An indication of a fault that led to a North Sea helicopter crash in which 16 men died had not been recognised just a week earlier, a report has found.

All 14 passengers and two crew lost their lives in April 2009 when the Bond Super Puma came down off Peterhead.

The Air Accidents Investigation Branch (AAIB) said an indication of gear degradation had not been picked up on.

There was a “catastrophic failure” of the main rotor gearbox as a result of a fatigue fracture, it said.

The Super Puma helicopter had been returning from BP’s Miller oil platform when it crashed about 11 miles north east of Peterhead, in Aberdeenshire.

Eight of the victims came from the north east of Scotland, seven from Liverpool, Norfolk and Worcestershire, and one from Latvia.

The report said a magnetic particle had been found on the chip detector in the gearbox of the Eurocopter Super Puma a week before the crash.

However, it was not recognised as an indication of the degradation of a part of the gearbox known as the second stage planet gear.

The AAIB said: “The use of verbal and email communication between the operator and manufacturer on 25 March led to a misunderstanding or miscommunication of the issue.”

It was this second stage planet gear that failed just days later as a result of a fatigue crack.

The main rotor separated from the fuselage and the aircraft crashed into the sea as the helicopter was flying to Aberdeen from the Miller Platform.

‘Final transmission’

The report said the captain had transmitted a mayday followed by the co-pilot.

“One second later, one of the flight crew uttered an expletive; this was the final radio transmission,” the report added.

The report makes 17 safety recommendations.

Bill Munro, managing director of Bond Offshore Helicopters, which is part of the Gloucestershire-based Bond Aviation Group, said: “The manufacturer’s procedures have been strengthened and Bond, along with others in the industry, implemented those changes immediately.

“We take a rigorous approach to safety and will continue to do so as technology and best practice evolve. Our company will also implement any further actions required by the industry which are issued by the authorities and manufacturer as a result of the report.

“Our thoughts remain with the families of those who died, and their loss is a constant driver in our commitment to the highest standards of safety in all our operations.”

Eurocopter said it remained committed to working closely with the regulatory authorities, investigators and its operators to prevent the risk of accidents.

‘Significant developments’

A Crown Office spokesperson said: “The Crown Office and Procurator Fiscal Service (COPFS) welcomes the publication of the report on this tragic incident by the Air Accidents Investigation Branch, following a technically complex and challenging investigation.

“The findings contained therein will now be fully considered by the health and safety division of COPFS.

“The division and Grampian Police have been engaged in this investigation since the tragedy occurred and will continue to progress lines of inquiry and carry out such investigation as is necessary in order that a decision may be taken in relation to the form of any proceedings.

“The liaison with the nearest relatives of the 16 men who lost their lives will also continue and the division will keep them advised of significant developments.”

Crew names

The two crew who died were Captain Paul Burnham, 31, of Methlick, Aberdeenshire, and co-pilot Richard Menzies, 24, of Droitwich Spa, who worked for Bond Offshore Helicopters.

The KCA Deutag employees killed were Brian Barkley, 30, of Aberdeen; Vernon Elrick, 41, of Aberdeen; Leslie Taylor, 41, of Kintore, Aberdeenshire; Nairn Ferrier, 40, of Dundee; Gareth Hughes, 53, of Angus; David Rae, 63, of Dumfries; Raymond Doyle, 57, of Cumbernauld; James John Edwards, 33, of Liverpool; Nolan Goble, 34, of Norwich, and Mihails Zuravskis, 39, of Latvia.

The other victims were James Costello, 24, of Aberdeen, who was contracted to Production Services Network (PSN); Alex Dallas, 62, of Aberdeen, who worked for Sparrows Offshore Services; Warren Mitchell, 38, of Oldmeldrum, Aberdeenshire, who worked for Weatherford UK; and Stuart Wood, 27, of Aberdeen, who worked for Expro North Sea Ltd.

SOURCE

BORNEO POST: MHS helicopter catches fire, aborts take-off : 24 February 2006

EXTRACT: “The ill-fated Super Puma was airlifting 11 employees of Shell and its contractors when it ran into trouble and crashed into the South China Sea during a routine flight to the offshore gas production platform B11 in Bintulu waters at noon.”

Royal Dutch Shell terrorist tactics against Malaysian whistleblower …

EXTRACT: “For his audacity in raising the reserves issue, Dr Huong was demoted, appointed as an asset manager with responsibility for helicopter flights. Once again, his integrity got him into trouble when he raised concerns over helicopter safety, recording in internal documents that Shell employees were being used as guinea pigs on test flights.”

Secret saga behind a 9 billion barrel block in Nigeria

Nov 19th, 2011

by John Donovan.

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From AFRICA ENERGY INTELLIGENCE 24 AUGUST 2011

After ten years of maneuvering and court cases, Shell ended up by offering to buy Malabu Oil & Gas’ offshore block OPL 245 (see our report in AE1 656). The stakes in the game were indeed high. lying alongside Total’s Akpo block, the acreage could contain up to 9.23 billion barrels. Amid rising calls for local ownership of Nigeria’s oil resources, the transfer of the country’s most promising license to a Western major could prove politically dangerous to the new government of president Goodluck Jonathan.

Malabu under siege

With Agip as its partner, Shell offered S1.3 billion to Malabu Oil & Gas for all of OPL 245 in early July. After fighting the Anglo-Dutch major for years in order to retain control of the concession, Malabu, founded and headed by former oil minister Dan Etete (1995-1998), had little choice but to accept: many other majors had been jockeying for years for a piece of OPL 245, and particularly China National Petroleum Corp, China National Offshore Oil Corp and Taiwan’s China Petroleum Corp, but had backed away because of the fear of legal trouble with Shell.

Debuting on OPL 245 in 2000 as minority partner of Malibu, Shell got the government of Olusegun Obasanjo to evict its Nigerian partner in 2002 and remained the lone operator of the concession for four years. To recover its acreage, Malabu instigated legal action in the United States and Nigeria and finally recovered OPL 245 in 2006. However, Shell never resigned itself to the loss and continued to include OPL 245 among its assets logged in its annual reports, although specifying that its rights were “disputed.” When Shell was OPL 245′s operator, it drilled two wells in 2005, Etam 1 and 2, that identified no less than 1,08 billion barrels of probable reserves (PSO). According to a study carried out in 2007 by the geophysical consultancy Ikon Sciences, the total of probable reserves on OPL 245 could amount to 9 billion barrels.

High Risk Operation for Abuja

Shell and Malabu signed a memorandum of understanding early this summer but Nigeria’s Department of Petroleum Resources hasn’t yet approved the transaction. And for a very good reason: Malabu was awarded its license under an indigenization program and its production sharing contract specified that 40% of the acreage had to be owned by a Nigerian company.

Transferring the block to Shell would require drafting a new contract. Moreover, state-owned Nigeria National Petroleum Corporation won’t be involved in the operation. As a result, Shell’s acquisition of OPL 245 could appear starkly at odds with calls by the current oil minister, Diezani Alison-Madueke, to nationalize the country’s oil resources.

Legal Compromise

To speed up the Nigerian government’s decision on OPL 245, Shell discreetly laid to rest an arbitration procedure this summer that it had launched against Abuja in 2007 before the International Center for the Settlement of Investment Disputes (1(510), a wing of the World Bank. Shell demanded $500 million in damages and interest. The case, instigated by Ann Pickard, who was vice president for exploration and production for Shell in Africa at the time, deeply strained relations between the Anglo-Dutch giant and the Nigerian government. Shortly after Pickard’s departure (she has headed Shell Australia since 2009), her successor, Ian Craig, decided on switching strategy: arbitration against Nigeria was gradually set aside (the latest report to the arbitration tribunal was sent in May, 2010) and direct bargaining with Malabu began. It was those talks that led to the MOV in July.

Ten years of coverage on OPL 245 can be found on our site Africaintelligence.com in the report “Shell vs Malabu: the OPL 245 Saga”.

U.S. Plans New Sanctions Against Iran’s Oil Industry

Nov 19th, 2011

by John Donovan.

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By MARK LANDLER and ALAN COWELL

A version of this article appeared in print on November 19, 2011, on page A8 of the New York edition.

WASHINGTON — The Obama administration plans to impose a new round of sanctions against Iran’s petrochemical industry, a Western official briefed on the plans said Friday, less than two weeks after a United Nations report published evidence that the Iranian government was working on a nuclear weapon.

The sanctions, expected to be announced on Monday, build on existing measures against Iran’s oil and gas industry, which aim to curb foreign investment in refineries or other facilities. European nations are expected to announce similar measures when their leaders meet later in the week, the official said.

The sanctions come after the United Nations’ nuclear watchdog, the International Atomic Energy Agency, rebuked Tehran on Friday, but stopped short of threatening further pressure or actions to curb its contentious uranium enrichment program.

In the wake of the report, the United States has been working to build international support for new sanctions. Much of its focus has been on cutting off the Iranian central bank or placing further curbs on the petroleum industry.

But there are hurdles to sanctioning Iran’s central bank, because China, Japan and other countries rely on it to process transactions for purchases of oil. The White House is also reluctant to undertake measures that could lead to spikes in oil prices and rattle a fragile American economy.

While the details of the new sanctions were sketchy — and the Treasury Department declined to comment — the official said they were focused more on investments in Iran’s petrochemical industry than on cutting off sales of oil, which could disrupt the market.

Meanwhile, the criticism from the nuclear agency drew an immediate and sharp response from Iran, which maintains that the evidence for the agency’s report was fabricated by enemies of the Islamic Republic. An Iranian envoy insisted that his country would not be deterred “for a second” from a nuclear program it says is for peaceful purposes. The diplomat also said Iran would boycott a planned meeting next week of Middle Eastern countries, called to discuss ways of freeing the world of nuclear weapons.

The exchanges came at the end of a two-day closed meeting of the 35-member board of governors of the atomic energy agency at its headquarters in Vienna. The agency’s report last week drew on a vast trove of evidence to conclude that there was a “credible” case that Iran engaged in secret and possibly continuing efforts to construct a nuclear weapon.

The concluding resolution, approved overwhelmingly, did not refer to punitive measures against Iran, or send the matter to the Security Council for action, reflecting the diplomatic balance between Western powers eager to crank up pressure on Iran and two leading powers in the diplomacy, Russia and China, that have adopted a milder line.

The resolution expressed “deep and increasing concern about the unresolved issues regarding the Iranian nuclear program,” and urged Iran to return to talks and restrain its nuclear work as outlined by prior Security Council resolutions. The board approved the statement by 32 to 2, with Cuba and Ecuador opposing it and Indonesia abstaining.

The resolution did not set deadlines for Iran to comply with the agency’s demand for access to nuclear sites for its inspectors and greater openness about the country’s nuclear program.

In a statement, the White House welcomed the agency’s sharp criticism of Iran, emphasizing the completeness of the case against Iran made by the agency’s report. “The Director General’s report and today’s action by the Board of Governors expose once and for all the hollowness of Iran’s claims, and reinforce the world’s demands that Iran come clean and live up to its international obligations,” the statement said.

The Iranian envoy to the agency, Ali Asghar Soltanieh, said his country would not halt uranium enrichment for even “a second,” Reuters reported, after having earlier dismissed the resolution’s mandates as “not legally binding, thus they are not applicable.”

Mr. Soltanieh said his country would not participate in the planned gathering next week, under the agency’s auspices, of Middle Eastern countries, likely to include Israel and Arab states.

Western powers that have long pressed for Iran to halt its nuclear enrichment program — the United States, Britain, France and Germany — appear to have been unable to use the unexpectedly strong agency report to create a consensus for stronger action. Instead, the relatively mild resolution reflected lengthy and intense diplomatic wrangling with Russia and China, the other countries most directly involved.

Earlier, Mr. Soltanieh accused the nuclear agency of endangering the lives of Iranian scientists by releasing their names in an annex to last week’s report about the suspicions of nuclear weapons work.

“The release of the names of the Iranian nuclear scientists by the agency has made them targets for assassination by terrorist groups as well as the Israeli regime and the U.S. intelligence services,” he said in a letter to the body’s director general, Yukiya Amano.

Parts of the letter were published by Iran’s state-financed Press TV satellite broadcaster, which noted that several Iranian nuclear scientists had been killed in incidents attributed by Iran to Israeli, British and American intelligence services.

Mr. Soltanieh contended that disclosing the names of Iranian experts represented a violation of the agency’s rules and said Tehran reserved the right to seek damages from the agency for any harm to its personnel or property as a result of the report — a possible reference to Tehran’s frequently voiced fears of an Israeli military strike on its nuclear facilities.

The agency’s report has amplified talk of a potential Israeli attack, a move that Defense Secretary Leon E. Panetta said last week would have a “serious impact” on the Middle East and possibly on American forces in the region, without seriously disrupting Iran’s nuclear program.

On Friday, Mr. Panetta planned to meet Ehud Barak, his Israeli counterpart, and indicated that he would speak of potential “unintended consequences” from a military strike. He was speaking to reporters traveling with him to a security forum in Canada, where he is to meet with Mr. Barak.

Mark Landler reported from Washington, and Alan Cowell from London.

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